Ryszard Bugaj, the economy advisor of President Lech Kaczynski, has criticized the government's ideas for lowering the budget deficit. During today's interview for Polish Radio, he stated that the reduction of public spending would result in a decrease in economic growth.
Bugaj also explained that budget cuts will, paradoxically, bring an increase to the deficit. In his view, the cuts will decrease aggregate demand within the economy – the result will be less tax income coming into the government coffers.
Bugaj claims that stimulating the economy via investment would bring the desired result. He expressed that the today's meeting between the Prime Minister and Jarosław Kaczyński will bring some solutions for the Polish economy. He also emphasized that the constant animosities between the government and Law and Justice seriously harm Polish economy, especially considering the current crisis.
The Prime Minister Donald Tusk and the chairman of Law and Justice, Jarosław Kaczyński are going to discuss the ways of fighting the crisis today at 6pm.
Silimar criticisms to those of Bugai have come from the Union for a Better Future (Porozumienie dla Przyszlosci), a recently formed centre-left political grouping, which has criticsed government plans to cut public spending at a time of declining demand in the economy.
Dariusz Rosati, a former member of the Monetary Policy Council and head of the union, says that he has plans which would trigger economic growth and protect work places. "We are going to suggest a public debate about what would be the best for Poland," said Dariusz Rosati, who is a member of the European parliament.
In his view, the current policy of the government is not well thought through and raises questions regarding both the attitude of the government towards the crisis as well as proposed cuts.
"First, we have been assured by the government that no crisis would take place. Then, a week ago, the Prime Minister announced the crisis had arrived and demanded cuts from ministries, with a deadline of just three days. Such a situation causes much doubt considering the fact that the entire budget plan fell apart only three weeks after it had been accepted by Sejm," said Rosati.
The conclusion is that either the government had known what was coming a long time ago and had been deliberately concealing the information, or seriously underestimated the threat. Both possibilities undermine the credibility of the government.
According to Rosati, the solutions put forward by the government are questionable since they intend to limit the demand, which will exacerbate the recession and so increase unemployment.
"The government has failed to prove that cutting costs is more efficient than keeping the expenses at the same level and thus securing jobs. The government should protect employment, which would bring income to the government in the form of taxes and Social Insurance premiums, " assured Rosati.